Manchester City’s two-year European football ban was overturned today by the Court of Arbitration for Sport. The ruling raises many questions, not least over the integrity of UEFA’s Financial Fair Play regulations (FFP).
City were issued the ban by European football’s governing body last February. It was as a result of an investigation they launched after German newspaper Der Spiegel leaked documents that suggested the club had been untruthful when valuing a sponsorship deal that they had received.
This was important as it alleged that the Manchester club had misled UEFA in order to appear to have broken even and met FFP regulations.
UEFA’s club financial control body (CFCB) deemed the club to have committed “serious breaches” between 2012 and 2016; they subsequently banned the City from European club competitions for two seasons, set to begin from next term, and fined them €30 million for, “failing to cooperate in the investigation”.
The specifics of the financial negligence that City were reported to have undertaken relate to their title sponsor, Etihad. The club were said to have lied about a £67.5 million payment they received in 2013.
Der Spiegel alleged that the sponsor only paid £8 million instead of the full amount. Abu Dhabi United Group, who conveniently own both City and Etihad, apparently covered the remainder. This implied that the club had disguised equity funds as sponsorship contributions.
The court’s ruling found this not to be the case, overturning the ban and downsizing the fine for the club’s lack of cooperation. City will now have to pay UEFA just a third of the original fine, which equates to £9 million.
Were the ban to have stood, the club could’ve lost somewhere in the region of £200 million as a result of being banned from European competitions.
City reportedly hired David Pannick QC who is rumoured to have charged an eye-watering £20,000 per day. Pannick twice represented Gina Miller successfully. First, in 2016 when he blocked Theresa May from taking the UK out of the EU without parliamentary consent. Before helping Miller again last September when Prime Minister Boris Johnson prorogued Parliament.
The court are not expected to release their full findings for a few days but said: “that most of the alleged breaches reported by the adjudicatory chamber of the CFCB were either not established or time-barred”.
They went on to clear the club of any acts of “dishonest concealment” of sponsorship funding and stated that their failure to cooperate didn’t warrant a two-year competition ban.
Now, the Sky Blues will hope that this ruling ensures that the likes of both Kevin De Bruyne and boss Pep Guardiola will still be around when the Champions League begins again next season.
For UEFA, however, this decision puts major scrutiny on their regulations and their integrity as a governing body. City’s two-year ban was for actions taken in 2013 yet the governing body’s financial laws have a five-year statute of limitations on them. Given that UEFA imposed the ban after five years had passed, it raises questions over whether they understand their own laws.
European football’s governing body now faces mounting pressure to make changes. FFP has allowed a club, previously charged with a breach of regulations in 2014, to pay a measly fine of just £9 million. It doesn’t take the world’s biggest football fan to know that this fine is just pocket change for City’s owners.
Admittedly, some rightly state that FFP’s main aim was not to stop excessive spending from billionaires who owned some of the elite clubs across the continent. Instead, it was to ensure that clubs such as Portsmouth or Malaga weren’t spending money that they didn’t have.
When it comes to European football’s big spender, UEFA are right to ensure that finances are regulated but the current laws act as no deterrent – Manchester City’s owners could lose £9 million down the back of the sofa and they wouldn’t even know it.
By Pete Trifunovic